Thursday, February 25, 2010

FBI Raids Offices of Three Toyota Parts Suppliers

The Wall Street Journal

Three Japanese automotive parts suppliers, tightly tied to Toyota Motor Corp., were raided Tuesday by the Detroit office of the FBI over allegations of price-fixing.

Warrants were carried out on the Michigan offices of Yazaki North America in Canton, Denso International America Inc., in Southfield, and Tokai Rika, also known as Tram, in Plymouth, an FBI spokeswoman confirmed Wednesday.

"The antitrust division is investigating the possibility of anticompetitive cartel conduct of automotive electronic components suppliers," said Department of Justice spokeswoman Gina Talamona. "We are coordinating with the European Commission and other foreign competition authorities."

The department is looking at possible anticompetitive behavior of these companies, not at the parts themselves, a person familiar with the investigation said. Toyota has ownership stakes in Denso and Tokai Rika. There is also no connection between the investigation and Toyota's recall problems.

U.S.-based auto parts makers have for years cited frustration in attempting to win new contracts from Toyota when bidding against one of Toyota's "captive suppliers."

Denso confirmed it was inspected by the FBI and said the investigation was based on allegations of violations of antitrust laws.

"We are fully cooperating with the investigation," said a Denso spokeswoman, who added that the investigation wasn't linked to Toyota's recent recalls.

The two other companies couldn't immediately be reached for comment.

Toyota spokeswoman Cindy Knight said the company is still trying to determine why the FBI is investigating Denso, Yazaki and Tokai Rika.

"Toyota is aware that certain suppliers have been contacted by government officials, but we have limited information about the scope of the investigation," Ms. Knight said. "Toyota has not been contacted by authorities."

The raid comes as Toyota and federal automobile-safety regulators are appearing in Congress Wednesday to testify about problems of unintended acceleration in some Toyota vehicles.

Yazaki supplies several electronic components, while Denso makes a variety of parts including accelerator pedals that Toyota has used in its vehicles. Those pedals weren't involved in the recent recalls of Toyota vehicles based on complaints of unintended acceleration.